Asian countries put the humiliation of the 1997 financial crisis behind them yesterday, arguing they were in a better position to deal with the sort of meltdown that crippled the region a decade ago.
Regional economic chiefs warned against complacency but nevertheless struck a defiant note at a forum in Manila to mark the 10th anniversary of a crisis that saw currency and asset prices plummet, governments topple and millions fall into poverty as investors withdrew capital at lightning speed.
Taking a swipe against the powerful Western-dominated global lenders such as the International Monetary Fund, Thailand's finance minister called for Asia to take more control of its economic destiny by setting up a monetary fund to promote exchange rate stability.
Since the crisis, Asian central banks have built up trillions of dollars in foreign exchange reserves, much of which is invested in Western assets such as US government debt, putting it in pole position to lead the international financial community, Chalongphob Sussangkarn said.
"It's important that we make sure that we do not become overconfident that a crisis can never happen,' Chalongphob said.
But he added: "Looking ahead, we need to take responsibility. Asia now needs to be the one to manage the global financial system.
"We cannot let debtor nations manage the global financial system. The International Monetary Fund (IMF) is more like a debtor monetary organization, we need a creditor monetary organization."
On July 2, 1997, Thailand gave up the fight to defend the baht after years of current account deficits and announced a managed float, triggering massive capital flight.
The contagion spread rapidly around the region and the erstwhile Asian "Tiger Economies" were forced to go cap in hand to the IMF, whose harsh prescriptions generated anti-Western sentiment and political turmoil.
Analysts say Asia's economies are now in much better shape. Most countries have competitive currencies and a big surplus in their current accounts, making the region a huge exporter of capital.
But Haruhiko Kuroda, president of the Asian Development Bank that hosted the forum, said this global economic imbalance was a risk.
"We have the potential for more bouts of financial market volatility," he said.
"Capital flows have ramped up significantly over the past several years as increased global liquidity, Asia's economic resurgence and dynamism, along with the search for yield has drawn in and out large amounts of investment capital."
In Thailand, where less than one in 10 property firms survived the crisis, The Nation newspaper splashed a tombstone on yesterday's front page inscribed with the names of the 56 finance companies and six banks that went under.
"Despite diverse efforts to avoid a repeat of history, no one can guarantee that it will not happen again," The Post Today, a Thai-language newspaper, said in an editorial.
Within a year of the meltdown, Indonesia's long-ruling President Suharto was out of power after the crisis sparked widespread rioting in his nation. In Malaysia, Prime Minister Mahathir Mohamad famously fell out with his deputy Anwar Ibrahim.
The crisis also brought down the South Korean and Thai governments.
Ten years on, Asia is booming once again, but investment and growth are largely centered on China and India.
Although the region is much richer it is still home to most of the world's poor as economic growth rates in many of the countries worst hit by the crisis lag their pre-1997 levels.
In an interview on Sunday, Chalongphob said an East Asian monetary fund would be established within five years to help promote further stability.
But Duck-Koo Chung, a former minister of commerce, industry and energy in South Korea, cautioned that the question of which country should lead a fund still had to be ironed out.
"We need some political agreement first," he said.
Source: China Daily/agencies